-In the above figure, suppose that the economy is at point A. An expected increase in the inflation rate to 6 percent will result in a movement to point
A) A, that is, there is no movement.
B) B.
C) C.
D) D.

Question

-In the above figure, suppose that the economy is at point A. An expected increase in the inflation rate to 6 percent will result in a movement to point
A) A, that is, there is no movement. 
B) B. 
C) C. 
D) D.

Quizplus · Accepted Answer

An expected increase in the inflation rate typically leads to a movement along the short-run Phillips curve, resulting in higher inflation and potentially lower unemployment, moving the economy to point C.

-In the Above Figure, Suppose That the Economy Is at Point